Whether we admit it or not, the health care industry significantly struggles with groupthink. If an industry leaders makes an innovative change, that masses will inevitability follow and claim as their own enhancement.
So, do you think that in 2021 there are still unique ideas being created, or are they merely enhancements to processes, products, and services that have already been established?
This week I focus on content related how innovative ideas can be formed, modified, or even hindered based on the complexities of our current systems. I review articles and podcasts that demonstrate how their are ways to be unique and innovative within your respective industry.
WEEKLY FORMAT 1 - Podcast 1 - Health Care Article 1 - Venture Capital Article 1 - Tweet
Podcast
A16z podcast: One on One with A to Z: How Much Rare Knowledge Is There?
Each week, Marc Andreessen and Ben Horowitz host a brief podcast where they answer submitted questions. Both are the founders of a16z, which is arguably the biggest venture capital firm in Silicon Valley that focuses on apply technology solutions to all industries. The two thought provoking questions they review are:
- How much rare knowledge in the world is there?
- How often does it happen that there are less than 10 people that know about, or can do something, that no one else in the world can?
They both discuss that there actually is a lot of rare knowledge in the world, and most of the time it is in plain sight, but we often overcomplicate things by introducing unnecessary barriers. This is common in all industries and particularly in health care. There are thousands of ways that we could improve, reduce cost, and provide easier access, and yet we have to constantly battle the almost impenetrable trifecta of health systems, payers, the government.
Marc and Ben also reference the book Zero to One by Peter Thiel (a phenomenal book if you haven’t read it). The one sentence summary of the book is, how many ideas in the world are actually unique vs. ideas that are merely replications of existing ideas.
The posing question I’ll leave you that Peter Thiel mentions is his book is: What is the thing you know that no one else knows —OR— what do you believe that no one else believes? That knowledge, experience, or skill may be something that could greatly improve things, so don’t sit on it too long!
Health Care Article
HBR: Stop Sabotaging Your Ability to Innovate
This is a great article from HBR that focuses on the mental dilemma that innovators face while pursuing ideas. I personally enjoyed the content because it helps answer the question: “How can I be optimistic regarding a new idea when I seemingly receive setbacks everywhere I turn?” This information doesn’t only apply to entrepreneurs who quit their comfortable jobs to pursue a startup, because these same principles apply to anyone working within large corporate systems.
The writers review hundreds of scenarios to find commonality within innovators, but reference well-known entrepreneurs (Bezos, Musk, Gates, etc.) to solidify their point. There were multiple light-blub moments for me throughout the article, particularly within the the Fear of Getting Started and the Frustration of Setback sections.
Feel free to make this your weekend read. It has a lot of great information that you can unpack.
Venture Capital Article
Sequoia Capital Just Blew Up the VC Model
One of my favorite things to do is think through existing business models. It’s like a Rubik’s Cube of options that you can create to have the best version of a company. Over the last serval years, and throughout my undergraduate studies, I reviewed the complexities of venture capital and private equity structures. It was fascinating to me to understand the back office administration of billion dollar funds and their accountability to LP’s, GP’s and founders.
The announcement from Sequoia Capital earlier this week made waves as they have shifted away from a traditional venture capital model, into a more transparent, open fund that allows for flexibility throughout all stages of investment.
Why it matters: Venture capital is the money of innovation, but the industry itself rarely innovates. This is a radical exception.
Details: The Sequoia Fund will serve as an open-ended capital vehicle; the sole limited partner for all future Sequoia “sub-funds” (seed, venture, growth, etc.). Sub-fund managers will decide on when to contribute assets into The Sequoia Fund, optimizing for their own return profiles.
- Limited partners will keep accounts with the Sequoia Fund, with annual redemption rights, and make allocation requests to sub-funds out of those account balances. In other words, the closed-end funds and the open-ended fund will continuously feed each other.
- Sub-funds will maintain Sequoia’s premium fee structure, including a 30% carried interest, while The Sequoia Fund will have a <1% management fee and a long-term performance fee with what I’m told is “a very high hurdle.”
- Sequoia employees will contribute at least 5% of The Sequoia Fund’s capital.
What will be the most fascinating is to see how many other venture capital firms follow this same path in the coming years. Everyone will think it is their own ‘unique idea’ when in reality, they are just mimicking what Sequoia or other funds have done. #groupthink
Tweet
“Patience is a virtue. We believe it’s also smart business.
The traditional 10-year VC fund cycle no longer makes sense for today’s world, or tomorrow’s founders.
Introducing The Sequoia Fund.”
See you next week.
Kyle Asay 
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